Discover how reimagining your business model could 10X your growth.
Imagine you’re playing a game of chess. You’ve spent years perfecting your strategy, studying every move, and mastering the art of the game. But what if I told you that you have the power to redesign the entire board?
This, my friend, is the potential of business model innovation.
By the end of this newsletter, you’ll see your business—and your industry—in a whole new light.
The Barbie Transformation
In 1959, Ruth Handler introduced Barbie to the world..
For decades, Mattel’s strategy was simple: create dolls, sell dolls, repeat. But in recent years, they’ve made a move that would make even the boldest chess player pause.
Mattel isn’t just selling dolls anymore. They’re selling stories, experiences, and dreams. The blockbuster Barbie movie isn’t just a film; it’s a statement. A declaration that Mattel is no longer just a toy company – it’s an intellectual property powerhouse.
This shift isn’t just about diversification. It’s about transformation.
- From Products to Experiences: Mattel now crafts narratives that span movies, TV shows, and merchandise.
- From Children to All Ages: The Barbie brand now resonates with adults, tapping into nostalgia and cultural relevance.
- From Seasonal Sales to Year-Round Revenue: IP-based income smooths out the peaks and valleys of toy sales.
CALLOUT But here’s the kicker: Mattel didn’t change what they were selling. They changed how they were selling it.
The McDonald's Real Estate Empire
Now, let’s talk about burgers. Or rather, let’s not.
Because while you might think McDonald’s is in the business of selling Big Macs, they’re actually in the business of buying and leasing prime real estate.
Surprised? So were many of their competitors.
In 2022, a whopping 40% of McDonald’s revenue came from rental income. They’re not just flipping burgers; they’re flipping real estate deals.
Here’s how McDonald’s unique real estate play works:
- McDonald’s buys prime locations and owns the land and buildings.
- They lease these properties to franchisees, often at a markup.
- Franchisees pay both rent (often a percentage of sales) and standard franchise royalties.
- This dual income stream, combined with long-term property appreciation, makes real estate a cornerstone of McDonald’s business model.
Unlike many franchises that focus solely on food sales and royalties, McDonald’s has effectively become a real estate company that happens to sell burgers.
McDonald’s didn’t just change the game. By finding another way to leverage their assets and market presence, they changed the board it’s played on.
The Lesson for Entrepreneurs
So, what does this mean for you, the tech leader or CEO?
It means that your biggest opportunity might not be in your product. It might be in your business model.
Ask yourself:
- What game am I really playing? (Change the rules) Are you selling software, or are you selling efficiency? Could you redefine the rules of your industry like Barbie did with entertainment?
- What assets am I overlooking? (Change the game) Your data, your network, your brand – these might be more valuable than you think. How could you leverage these to play a different game altogether, like Amazon did with AWS?
- How can I change the board? (Change the playing field) Don’t just innovate your product. Innovate how you deliver and monetize it. Could you transform your industry’s landscape like McDonald’s did with real estate?
The Path Forward
Here’s what I want you to do this week:
- Map Your Model: Write down how your business currently creates and captures value.(ie Money :))
- Question Everything: For each element, ask “Why do we do it this way?”
- Explore Alternatives: For each “why,” brainstorm three alternative approaches.
- Test and Learn: Pick one alternative and run a small-scale test.
Remember, Amazon wasn’t built by just selling books better. It was built by reimagining how retail works.
Uber didn’t succeed by building a better taxi. It succeeded by reimagining transportation itself.
You have the same opportunity as these businesses. You just need to see it.
Your Move
Business model innovation isn’t just a strategy. It’s a superpower. It’s the difference between playing the game and changing it entirely.
This is a core part of my coaching program. I help you innovate and optimize the business model.
Are you ready to make your move?
Until next week, keep innovating, keep leading, and most importantly, keep questioning the game you’re playing.
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